State predicts stabilized workers' comp rates

Both MDI and the National Council on Compensation Insurance are saying that underlying costs should drop 1.3 percent in 2005.

“These recommendations confirm that the workers’ compensation market in Missouri has stabilized after medical inflation prompted insurance carriers to raise rates substantially from 2001 to 2003,” said MDI Director Scott Lakin, in a news release. “The business community has every reason to believe that the pressures on their workers’ compensation costs are now under control.”

Under the recommendations, Missouri employers would pay out an average of $1.63 in benefits to injured workers under the NCCI version and $1.59 under the MDI calculations for every $100 of payroll.

From 1995 to 2000, Missouri’s workers’ compensation rates dropped overall each year, but from 2001 to 2003, average rates rose 4.7 percent, 9.2 percent and 14.7 percent, respectively. The increases were due to medical inflation, despite declines in the number of workplace injuries, the release stated.

Lakin said that both MDI and NCCI advised insurers that market conditions warranted price reductions in 2004, but companies have the right to calculate their own premiums and raised rates slightly.

According to MDI figures released Dec. 8, 110 of the 300-plus workers’ compensation insurers in Missouri reduced rates last year, while 100 insurers increased them. But despite a decade of inflation, the release said 241 companies are still charging lower rates for coverage than they did in 1994, when the state deregulated workers’ compensation rates.